Dec 7, 2011, 7:00am

Consumer confidence increased substantially in November as more consumers viewed both the economy and their personal finances as improving, according to the Discover U.S. Spending Monitor. The Monitor, a 4-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month, recorded more than a 7-point rise from the previous month to 86.3 percent.

Nearly 19 percent of consumers felt economic conditions were getting better in November, a rise of more than 4 points from October. Similarly, those who believe economic conditions were getting worse declined by 7 points from October to 55 percent.

While most consumers still view the economy as poor, the percentage of consumers giving the economy poor marks dropped seven points from last month to 61 percent. Only 8 percent of consumers rate the economy as good or excellent.

Most of the shift in views about the economy came from 18 to 39 year-olds, whose pessimism declined substantially in November. Within this group, those rating the economy as good or excellent increased three points to 11 percent while those rating the economy as poor decreased by 11 points to 58 percent. The change for both 40 to 64 year-olds and 65 and older was much more subdued, and less than 4 points in these categories.

Personal Finances Are Getting Better

Consumer sentiment toward personal finances also improved in November.

• 33 percent of consumers rate their personal finances as good or excellent, 3 points higher than October, and 24 percent rated their personal finances as poor, down 2 points from October and at the lowest level since July.
• Consumers believing their personal finances are getting better increased for the third consecutive month to 18 percent, up 2 points compared to October. The percent of consumers who believe their personal finances are getting worse declined to 50 percent, down more than 4 points from October and the lowest level since May.
• There was also a substantial decline in the number of men who felt their finances were worsening in November. Forty-seven percent felt their finances were getting worse, 9 points lower than the prior month.

Spending Intentions Rise, as More Consumers Have Money Left Over After Paying Bills

General spending intentions rose in November mirroring previous Monitor surveys during this time of year. Yet, more consumers plan to have money left over after paying their monthly bills.

• 39 percent of consumers plan to spend more next month, the highest level since July 2008. Only 15 percent of consumers plan to spend less next month, a decrease of nearly five points compared to October and the lowest level since August 2008.
• 48 percent of consumers expect to have money left over after they finish paying their monthly bills, an increase of more than 3 points compared to October and the highest level since February.

Consumers Planning to Boost Discretionary Spending

Improving attitudes about the economy and their personal finances has more consumers planning to spend the same or more in the month ahead on discretionary purchases.

• On holiday gift giving, 40 percent of consumers planned to spend the same or more on gifts compared to last year, up three points from October. Fifty-seven percent of consumers planned to spend less, down nearly 4 points from the prior month.
• 51 percent of consumers plan to spend the same or more on discretionary personal expenses such as going out to dinner or the movies, a 5-point rise from October, while those planning to spend less in this category declined by 5 points to 45 percent in November.
• On major personal purchases, such as a vacation, 49 percent of consumers planned to spend the same or more, an increase of 3 points compared to October. Forty-five percent plan to spend less, 4 points lower than the prior month and the lowest level since February.
• 48 percent of consumers planned to spend the same or more on home improvement purchases, up nearly 5 points from October.
• Consumers’ plans to save and invest next month were also more optimistic, with those planning to save the same or more increasing 8 points in November to 57 percent, while those planning to save less decreased nearly 4 points to 39 percent.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit http://www.discoverfinancial.com.